Migration and Social Replacement Incomes: How to Protect Low-IncomeWorkers in the Industrialized Countries against the Forces of Globalizationand Market Integration

Hans-Werner Sinn

Munich Reprints in Economics from University of Munich, Department of Economics

Abstract: This paper discusses how an industrialized country could defend the wages and social benefits of its unskilled workers against wage competition from immigrants. It shows that fixing social standards harms the workers and that fixing social replacement incomes implies migration into unemployment. Defending wages with replacement incomes brings about first-order efficiency losses that outweigh the budget cost to the government. By contrast, wage subsidies involve much smaller welfare losses. While the exclusion of migrants from a national replacement program does not improve the situation, the (temporary) exclusion of migrants from a national subsidy program makes it possible to avoid a distortion of the migration pattern.

Keywords: migration; unemployment; welfare (search for similar items in EconPapers)
JEL-codes: F15 F22 H5 I38 J61 (search for similar items in EconPapers)
Date: 2005-05
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Citations: View citations in EconPapers (9)

Published in International Tax and Public Finance 12(2005-05): pp. 375-393

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https://epub.ub.uni-muenchen.de/937/1/sinn-migration-and-social-replacement.pdf (application/pdf)

Related works:
Journal Article: Migration and Social Replacement Incomes: How to Protect Low-Income Workers in the Industrialized Countries Against the Forces of Globalization and Market Integration (2005)
Working Paper: Migration and Social Replacement Incomes: How to Protect Low-Income Workers in the Industrialized Countries Against the Forces of Globalization and Market Integration (2004)
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